In the News

Education loan default means losing access to credit

If you are a student planning to fund your higher education through
an education loan, be warned. Many who have taken this path before you
have defaulted. Non-performing assets (NPAs) within the education loan
segment have been rising. According to data from the Indian Banks
Association (IBA), NPAs in this segment rose from 7.3 per cent in
March 2016 to 7.67 per cent in March 2017. Not repaying the education
loan is no longer an option with the advent of credit bureaus. If a
student defaults, the records of all the four credit bureaus will
reflect it. “The default will affect the person’s credit report and
credit score. Access to any sort of credit will be denied. He will
have difficulty in getting even a credit card or a personal loan, let
alone bigger loans like a car or home loan”, says Manu Sehgal,
business development leader, emerging markets, Equifax, a credit bureau.